The Ontario Securities Commission
paper today intended to initiate a broad
consultative process to consider a number of potential new
capital raising prospectus exemptions.
Specifically, the consultation paper canvasses
the exemptions currently available in various jurisdictions,
including the U.S., Australia and the U.K. These exemptions are
generally based on (i) investor attributes (such as income and
financial assets); (ii) relationships with the issuer (such as
the family, friends and business associates exemption available in
jurisdictions other than Ontario); (iii) investment size (such
as Ontario's $150,000 minimum investment amount exemption);
(iv) disclosure; (v) "crowdfunding";
and (vi) offering size.
With respect to "crowdfunding" (which is the
popular term for funding a project or venture through small amounts
of money raised from a large number of people over the internet via
an internet portal intermediary), the potential for an exemption is
examined using the provisions of the U.S.
JOBS Act as a basis for discussion. Issues
considered include issuer restrictions, investor protection
measures, and the registration of funding portals. The paper also
explores a potential OM exemption (which, unlike other
Canadian jurisdictions, is not available in Ontario under NI 45-106) with a $1.5
million limit on the amount of capital that could be raised by an
issuer in a 12-month period and a limit on a purchaser's annual
investment of $10,000. The concept OM exemption is not
intended to be a recommendation and was provided by the
OSC for discussion purposes.
Ultimately, the paper recognizes that a desire to increase
access to capital for issuers and to increase investment
opportunities must be balanced with the need to protect investors.
The paper thus acts a number of specific questions regarding the
various options being considered, and the OSC states that no
decisions will be made without "broad public consultation and
discussion." According to the OSC, the paper is an
initial step in the public solicitation process.
Ultimately, while the paper demonstrates that regulators may be
willing to consider various options to increase the availability of
capital, it is yet unclear whether any new exemptions will be
adopted. Comments are being accepted until February 12, 2013.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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